Kaboom! Is that the sound of the real estate market imploding? You've heard the stories. You may have seen the numbers. Sales of previously owned homes plunged over the summer to the lowest level in more than two years. The supply of existing homes for sale reached a new record high and is at its highest level since 1993. New home inventory is at a record level of 132,000 unsold homes. New builder optimism is at its lowest level in fifteen years and earlier this week several national home builders announced disappointing results; There is a huge spike in foreclosures up more than 25% this year. The numbers and the stories keep coming and it isn't a pleasant picture.
What are home buyers and sellers to do?
First, and most important to remember in Centre County is that our market highs are never as high and our lows are never as low as the national market (thank you Penn State). The fact remains that homes are still selling in Centre County, albeit, at a slower rate than in previous years. Reasonably priced homes in good condition will sell in good and bad markets. Home sellers, listen to your listing agent when discussing price. The professionals do know what they are talking about and by heeding there advice you won't be disappointed. Buyers, I can’t imagine a better time to buy than right now. The seasonal selling cycle is winding down. Sellers are facing long days on market and many are anxious to sell. But foremost in the decision process is the cost of money. Current interest rates are still very good and provide buyers with the opportunity to buy a nice home at a reasonable cost. Although, in the face of inflation pressure with low unemployment and rising wages, I can’t be certain how long the rates will stay in the low 6% range so now is the time to act. The longer you wait the more expensive it may become.
Buyers, when faced with the decision to wait the market out in hopes of seller price cuts or buy now while rates are still good, I encourage you to buy now. Seller price reductions are occurring almost daily. The most frequently appearing sign in Centre County yards is “Price Reduction.”
That kaboom at the beginning of this story could be the celebration sellers and buyers will have when they complete a satisfactory transaction.